Economics

Your move, professor

PAUL KRUGMAN has long had an exceptional reputation as an economist, but the world at large didn't learn his name until he became the Bush-basher-in-chief as a columnist for the New York Times. This made for good reading for progressives, but it didn't have much of an impact on governance, since George Bush rarely agreed with Mr Krugman's liberal conscience.

How the tables have turned. Barack Obama has been doing his best to balance the 14 or so major crises about to be bequeathed to him by the current president. And given the fact that he now has to balance harsh political reality against the ludicrously high expectations of his supporters, he doesn't seem to be all that shaken by a little Nobelist armchair policy-making from the pages of the grey lady (see the most recent example here). On the contrary, he basically tells Mr Krugman to bring it:

Of course, Mr Krugman, being a smart fellow and a good economist, may well have some specific ideas. We anxiously await his response.

One move Mr. Krugman may want to consider is a consultation with CBO's Douglas Elmendorf. An analysis of outdated federal programs and savings realized by eliminating said programs would be an efficient use of the 2008 Sveriges Riksbank Prize in Economic Sciences' time. The entire nation would be indebted to this great and noble countryman who volunteered his service in defense of our economy.

Not to worry. Paul endorse anything that Hillary would do. Obama doesn't need Paul's own suggestions - he should merely ask Hillary. She is in his cabinet after all.I like this approach for the financial sector for example, as outlined here by Fama:http://www.dimensional.com/famafrench/2009/01/government-equity-capital-for-financial-firms.htmlBut this only one part of the whole... if we continue to subsidize "bad" and tax "good"...